BY GARY FINEOUT AND CURT ANDERSON
TALLAHASSEE, Fla. -- The key players behind a purported veterans charity accused of setting up illegal gambling rooms pumped more than $1 million into the campaign accounts of politicians who had the power to regulate or put them out of business.

As the untaxed, barely regulated industry mushroomed into a billion-dollar industry, money went to the campaigns of governors in Florida and North Carolina as well as dozens of state legislators, and state political parties.

"They certainly were involved in the process there's no doubt about that," said Florida House Speaker Will Weatherford, who himself received a $500 check from one of the companies involved.

An Associated Press review of contributions showed nearly $1.1 million went into Florida campaign accounts from 2009-2012 and more than $150,000 in North Carolina.

Allied Veterans of the World ran nearly 50 Internet parlors in Florida with computerized slot machine-style games and gave about $6 million to veterans out of nearly $300 million in profits. Investigators said much of the money went to charity leaders, who spent much of it on boats, beachfront condos and vehicles such as Maseratis, Ferraris and Porsches.

The operations were shut down this week and nearly 60 people arrested. Jennifer Carroll, Florida's Republican lieutenant governor, abruptly resigned after being questioned by investigators. Carroll did consulting work for Allied Veterans while she was a state legislator. She was not charged with wrongdoing.

Undercover law enforcement agents fanned out in the beginning of 2012 to conduct undercover investigations of 44 Allied Veterans locations, according to an Internal Revenue Service affidavit filed in federal court.

The agents labeled the parlors "Internet casinos," saying employees urged them to pay more to gamble to win the biggest prizes. According to the IRS, that violates a Florida law saying any sweepstakes game couldn't have different levels of prizes for those who made donations and those who did not.

One undercover agent who took the employees' advice to bet higher amounts won more than $630 in a single spin in December 2011 at an Allied Veterans site in Lake City - and was told he could have won even more if he'd bet more.

After the arrests were announced Wednesday, authorities said the next phase of the investigation would focus on campaign contributions and lobbying.

A review of Florida contribution records showed several people arrested donated to state politicians, as did the Oklahoma-based software company that worked with Allied. In addition, many of the more than 100 companies linked to the Jacksonville attorney who has been accused of masterminding the racketeering scheme also made contributions.

In Florida, a large chunk went into the coffers of the two political parties: The Republican Party of Florida received nearly $300,000, while the Florida Democratic Party has received nearly $150,000.

Money was also given to many top Republican politicians as well as legislators who have been deeply involved with the future of gaming in the state.

The games have come under scrutiny in Florida but are in a gray legal area. The past two years, there have been bills to regulate or ban them outright, but they have not passed.

Sen. Miguel Diaz de la Portilla, R-Miami, took donations from four people who were arrested as well as some companies linked to the scandal. He has been pushing a bill to regulate the operations instead of banning them. Diaz de la Portilla said just because he took the donations does not mean he knew about any illegal activity.